Medsider: Learn from Medtech and Healthtech Founders and CEOs - Failing Forward in Medtech: Interview with Mara McFadden, CEO of Endolumik

Episode Date: July 5, 2023

In this episode of Medsider Radio, we sat down with Mara McFadden CEO of Endolumik, developers of an innovative fluorescence-guided esophagogastric calibration system. Mara graduated as a mechanical engineer from the University of California, Berkeley. She further developed her business acumen during her MBA at Carnegie Mellon University and in various leadership positions with renowned healthcare companies such as Johnson & Johnson and Philips Healthcare. Mara co-founded Endolumik, and in this interview, shares her philosophy of embracing imperfections and learning from your failures, why customer engagement and team culture are integral to business growth, and how the art of smart fundraising can lead to a thriving venture.Before we jump into the conversation, I wanted to mention a few things:If you’re into learning from proven medtech and health tech leaders and want to know when new content and interviews go live, head over to Medsider.com and sign up for our free newsletter. You’ll get access to gated articles, and lots of other interesting healthcare content.Second, if you want even more inside info from proven experts, think about a Medsider premium membership. We talk to experienced life science leaders about the nuts and bolts of running a business and bringing products to market.This is your place for valuable knowledge on specific topics like seed funding, prototyping, insurance reimbursement, and positioning a medtech startup for an exit.In addition to the entire back catalog of Medsider interviews over the past decade, premium members get a copy of every volume of Medsider Mentors at no additional cost. If you’re interested, go to medsider.com/subscribe to learn more.

Prototypes aren't supposed to be perfect. Don't let the failure or failure hold you back. The goal is to fail fast, fail inexpensively, and learn from each and every iteration. Welcome to Medsider, where you can learn from the brightest founders and CEOs in medical devices and health technology. Join tens of thousands of ambitious doers as we unpack the insights, tactics, and secrets behind the most successful life science startups in the world. Now here's your host, Scott Nelson. Hey everyone, it's Scott. This MetSitre interview I sat down with Mara McFadden, CEO of Indolumic.

Mara graduated as a mechanical engineer from the University of California, Berkeley. She further developed her business acumen during her MBA at Carnegie Melligan, and later on working with renowned healthcare companies such as J&J and Phillips. Mara co-founded Indolumic, a developer of an innovative, fluorescence-guided gastric calibration system. Here are few the key things that we discussed in the this conversation. First, fail fast, fail often, and fail inexpensively. Don't obsess about perfection during the prototyping phase. Your first iterations are bound to have flaws, but there are also

valuable lessons in each phase of testing. Second, the success of your startup greatly depends on what kind of culture you cultivate. Build a supportive, enthusiastic, and passionate environment with a customer-oriented approach to everything you do. Third, you need to understand the numbers from the perspective of your investors when it comes to fundraising. Focus on capital partners who comfortable and have experience in your industry. You'll save time and energy by making sure your investors align with your company's vision. Before we jump into this episode, I wanted to let you know that we just released the latest edition of MedSider Mentors, Volume 3, which summarizes the key learnings from the most popular Medsider interviews over the last several months

with folks like Jim Persley, CEO of Hinge Health, Carol Burns, CEO of Cajent Vascular, and other leaders of some of the hottest startups of the space. Look, it's tough to listen or read every Medsider interview that comes out, even the best ones. But there are so many valuable lessons you can glean from the founders and CEOs that join our program. So that's why we decided to create Medsider mentors. It's the easiest way for you to learn from the world's best medical device and health technology entrepreneurs in one central place. If you're interested in learning more, head over to medsiderradio.com forward slash mentors. Premium members get free access to all past and future volumes. If you're not a premium member yet, you should definitely consider signing

up. In addition to every volume of Medsider mentors, you'll get full access to the entire library of interviews dating back to 2010. This includes conversations with experts like Nadine Yared, CEO of CVRX, Renee Ryan, CEO of Cala Health, and so many others. Learn more by visiting medsiderradio.com forward slash mentors. All right, Mara, welcome to Medsider Radio. Looking forward to this conversation. Thanks so much for having me, Scott. I've provided kind of a brief overview of your background, which I think is super interesting, especially a lot of your consumer-centric kind of experiences with various companies that we'll certainly get into. But let's start there. Tell us, you know, maybe in a couple minutes without,

you know, going too far in depth. Give us a high-level sense of kind of your professional background leading up to your current role as CEO of Indulumic. Absolutely. Thanks so much for the opportunity. I have had a long career mostly in the medical device industry, but as you mentioned, I've taken some sidetracks through consumer tech as well. But I started off my career actually as a mechanical engineer. I went to Cal Berkeley, got my engineering degree and was honestly incredibly lucky to stumble into Johnson and Johnson. They had a really cool program when I was graduating the gold program or global operations leadership development where it was a rotational program. You got to see a bunch of different parts of the business. And I learned so much there. But I landed

within what was at the time their Cordes Division. So I was manufacturing endovascular stents doing design and manufacturing engineering with Johnson and Johnson for many years, which was phenomenal experience that I've actually had to apply recently today as a founder of writing specifications, developing manufacturing processes. It was a really solid foundation in that. But after I kind of grew in my career and realized I wanted to have more of a strategic insight in products as well, I went to get my MBA at Carnegie Mellon University Tepper School of Business and went to Phillips Healthcare after I graduated into a product management role. And I don't know about you, but I think product management is one of the most fun jobs out there. I loved being a product manager.

I was with them for many years. I got to manage a big global P&L in their home life support ventilation business unit. I got to launch a bunch of products, really learn the blocking and tackling of go-to-market with medical devices. And while I really, really love my experience there, after I've been there about four or five years, a local here in Pittsburgh, Pennsylvania, consumer robotics technology for moms, reached out and recruited me away.

And I think at any other time in my life, I would have been, look, I'm a medical device person, not attractive, but I had just given birth to my first child. They made juvenile products, you know, strollers, swings, that sort of thing. So it was kind of a problem. perfect fit. So I jumped in with them. They were a pretty early stage startup at the time. They had just raised, I can't remember if it was their series B or series C round of financing.

And I got my first taste of the startup world and entrepreneurship. So I got to build up their product management group, launch a bunch of products, learn more about the consumer facing market. And it was so much fun. But after a few years, I have to say I really did miss the med tech world. there's something about knowing the products you're making are headed out into the world to save lives and really kind of do some good in the world, then I missed. So after a few years with them, I returned to the medical device space. I worked with a few small startups doing advising. I was working with a med tech incubator. And that's where I met my co-founder and the Lumenik was born. Awesome, awesome overview. And yeah, four moms. We've purchased a few products from four moms in the past.

I remember this was probably like 10 years ago. I remember, seeing like videos, like the product demo videos online. It was like phenomenal. Like they always had like did an amazing job of like product demos. I'm not sure if you were you were responsible for some of those. But yeah, it was a great great great brand. In fact, when we first started building juve, which is technically a class two device that we commercialized, but it was very consumer oriented kind of positioning and commercialization strategy. Used a lot of that, you know, those videos for, you know, as an inspiration. Yeah. So. Oh, that's such a nice compliment. Thank Thank you so much.

That was, of course, not all me. We had a big, amazing marketing team of four moms. We called those our wow videos. And I do think that was something that we did really well. We were pretty great at communicating the features and benefits of the product and how they connected to kind of the emotional needs of a parent. I think that was a strength of four moms of kind of telling that story and keeping the brand identity alive.

But yeah, we made some really wonderful products and launched them. And there was some incredible marketing team members there for sure. Yeah, no doubt. I actually think it's something that, a lot of device companies, even though maybe you're marketing and selling to to physicians or clinicians in general, like there's a lot of those consumer-oriented elements that often are just underappreciated and misunderstood and aren't taking full advantage of and pulling over into kind of that B2B kind of channel.

So yeah, maybe we'll have a chance to get into that in more detail. But quick comment regarding your, you know, when you went to Phillips and, you know, your product management role, I totally agree. I mean, that was one of the first rules that I had coming in-house at Cavidian at the time. And it's like you're the GM of like a, you know, a product or a product portfolio. And it's so the experience is invaluable, you know, to get your hands wet in so many different sort of functional, functional areas, especially if there's like an upstream and downstream component to it to the role. So, yeah, I mean, couldn't agree more. And if you're listening to this and maybe debating on making that move, even if it means a little bit less money, highly, highly encourage it, can encourage you to do it if you can make it.

Absolutely. Yeah, particularly if you want to get entrepreneurship, I think PM is. is such a great training ground for future entrepreneurs. It's where I learned a lot of things that I've carried forward into my entrepreneurial experience. Totally, totally, yeah. So Indolumic, so the website, Indolumic, E-N-D-O-L-U-M-I-K, Indolumic.com. It's a great website, actually.

I can tell that you've maybe got some consumer marketing chops because it's really nicely done. But that's the website if you're interested in learning more about the technology. We'll certainly link to it in the full summary piece on MedSider, but Endolumic is the site. Give us a sense for what this device is and kind of a little bit more about the origin story of the technology. And then we'll then we'll kind of step inside the Medsider time machine, as I like to call it,

and kind of go back in time and learn a little bit more about your learnings over your career and especially building Indilumic. But let's start with what you're doing now and what it does and sort of how this idea came to be. Okay, perfect. Sure. So Endolumic, our first product that we're launching is a gastric calibration tube. that's a device that uses near-infrared light to improve visualization during minimally invasive surgeries in the GI tract. So at its core, it's an orogastric tube with integrated section, but what really makes it

different and what makes it special is that we're using this near-infrared lighting to create fluorescent light, which helps enhance visualization for surgeons. They can see the device even when they don't have a direct line of sight to it. In minimally invasive GI surgeries, the gastric tube is inside the stomach, but the laparoscopic camera is outside the stomach and the abdominal cavity. So they have no direct line of sight. But our device allows them to see through the wall of the stomach and have that improved visualization.

This enhanced visualization improves safety and improves surgeon precision, and it allows improved performance for surgeons, or we hope it will allow improved performance for surgeons, because when you can see better, you can see a whole lot more clearly, you know, if you have better precision of dissection, exactly margins you're leaving around things. That enhanced visualization just opens a lot of doors for surgeons. Got it. It doesn't have a camera. It's a diagnostic, right? It's an illumination device, right, using near infrared wavelengths of light. It's a device. It's not a diagnostic. It's simply a surgical tool. So yeah, it's a tube that's inserted through the stomach, or sorry, through the mouth down to the stomach. And it's used to position the stomach

during procedures or the esophagus. It's used to calibrate the size of the anatomy, for example, in a gastric sleeve or a gastric bypass. You can size the remaining anatomy you're going to leave behind. And it's used to hold organs still when you're doing maybe surgical stapling, suturing. It keeps the stomach in place during those types of procedures. Got it. And so this probe, this like illuminance probe, it does sort of sit, it sits right there during the actual procedure itself, right? Yep, it's inside the stomach during the procedure and we're letting out near infrared light. And what's really cool is we work with any camera system out there that's designed to use near infrared light.

So, you know, some of the big camera systems today are Stryker, Olympus, Medtronic, they all have developed modes that are looking for near and for that light. And they didn't do this, especially for us, I wish. There's actually a medical tool out there called ICG Green or Indocyanine Green. It's a fluorescent dye that's typically used in perfusion. So it can be injected into, say, like, blood flow to see exactly where all something is flowing. So camera modes have been developed to see this dye and visualize it as fluorescent green. So the trick we pulled is we designed our device to emit light in the exact same frequency that this dye did. So any camera that's designed to see ICD dye sees us and visualizes us as fluorescent green as well.

Oh, interesting. That's cool. That's a cool concept. So that dye emits the same type of light wavelengths that your sort of illumination growth is. Okay, got it. Okay. Cool. Awesome. So give us a sense. We're recording this in, you know, Q2 of 2023. Give us a sense for where the company's at in terms of development, regulatory, commercialization. Yeah, it's been a busy few years. So this idea was invented, I guess, around three years ago now. Well, some of the initial publications were in 2019. We incorporated in 2020. But Dr. Nova Zoka out of WVU, she's the inventor. She's the co-founder of this device. She's amazing. She's an incredible innovator. And she had this idea of, you know, cameras have all these new modes. And sometimes you can occasionally see a little bit of a light from an endoscope. What if we kind of combine? these two tools to make it. So that was about in, like I said, the original ideas were 2019. We incorporated in 2020. And we just received our FDA off 510K authorization in March of this year.

So we are very, very, very excited to share that we're about to start sales in the U.S. We actually have our first commercial sales lined up in the next couple weeks, which is very exciting. Oh, wow. Yeah. And there's so many sort of founders and CEOs that come on the program and talk about, right? Like you're at that huge milestone where you've done all of this work. And it's just sometimes it's easy to gloss over that. But I mean, think about that. It's like three years in the making, right? And you're finally actually able to see this, this baby sort of born into, you know, into the end of the wild. Absolutely. It's been a really incredible couple of years. And you really can't underestimate the amount of workload that goes into providing all of that testing and justification.

We actually went through a kind of unique pathway with the FDA. We did get a 510K approval, which is fairly standard, but we went through the FDA's safer technologies program. I'm not sure if you're familiar with it. It's a sister program to the breakthrough device program. A lot of people are more familiar with breakthrough. Both programs were launched around the same time, I think, in 2020, 2021. And for whatever reason, the breakthrough program has been pretty heavily utilized. There's been a lot of devices that were launched.

through the breakthrough arm of it. But we were actually the first device ever authorized through the safer technology program, which we didn't even know until afterwards. They didn't tell us. But the amount of data you have to compile to demonstrate that not only are you effective, but safe. And in our case, even safer than some of the predicates that are available out there. You're right.

It is a huge amount of work. And it's been, you know, two hard years of R&D on my team's part. Got it. I don't expect you to have, you know, this to be a in the weeds regulatory discussion. But that's super interesting that you were the first device that was cleared for that program. Do you know why, like, why did, I guess why did you pursue that versus breakthrough device designation, which a lot of people listening are going to be familiar with that designation, or at least loosely, loosely have an idea of what that is? Like, why did you go down that path or maybe frame that or up up around like why,

others maybe should consider it. Yeah, absolutely. I would highly recommend it. So the terms of the programs themselves really define where we were a fit. So the breakthrough program is designed for devices where I forget the exact wording because that's not the path we chose. So I don't know quite as well. But it's intended for devices where I think the risk is mortality, where it's a very high risk of actually mortality associated with the device if something goes wrong or there's not other options. So think of it maybe closer to more of like a humanitarian device exemption, something like that, where you have a novel breakthrough in areas where there's kind of life and death consequences. For us, in the types of procedures where our device are usually used, that's a lot of metabolic surgeries, bariatric surgeries, hiatal hernia repairs, those sorts of things are kind of the common ones. Often, if there's an adverse event, the outcome isn't death of the patient.

but that doesn't mean it's nothing. It's, you know, it can be much more complicated surgery. It can be a revision. It can be an additional week of the hospital. So our device helps these procedures be a whole lot safer because of the enhanced visualization that we provide, but it's not necessarily bringing you back from kind of brink of life for death. So when we looked at the descriptions of the two programs, we were a better fit for that safer technology. We were taking a device that was existing on the market today and making. making it meaningfully safer than any of the other predicates had offered. Got it, got it. Okay, cool. That's super helpful overview. We may get into that in a little bit more detail, but let's kind of go back in time. You mentioned this has been kind of a two-plus year project in the making. You and your co-founder were working on this, the back half of 2020. Take us back to kind of those early alpha and beta prototypes. You know, were there a couple key lessons that that you learned kind of looking back at that time period? because it's so crucial for any founder or CEO in those early stages to be to be really capital efficient, right, as they iterate through these various designs. And so a couple things that come to

mind that that you learn through that process. Absolutely. Yes. Capital efficiency was wildly important to us. You know, I think we'll probably talk about fundraising later, but it can be a real challenge to fundraise. So we wanted to make sure that every dollar we spent was tied to a meaningful milestone. So when I think about those early days, we obviously made lots of mistakes and there was lots of lessons learned. But I think one of the biggest things that we found to be important was not to obsess about being perfect. You know, your animal model, your pig model that you're testing out might not be perfect. Your early prototypes might not be perfect. They might not have all the exact properties you want. But you can still learn from every test you do, from every step forward

you take. So, you know, prototypes aren't supposed to be perfect. Don't let the fear of failure or failure hold you back. The goal is to fail fast, fail inexpensively, and learn from each and every iteration. So you can lock in what did work. Why did it work? What do we know about the parameters of this prototype that were successful versus the one that we tried that wasn't successful? So we had to do a lot of playing around. For us, the flexibility of the tube is a real critical criteria. It needs to be soft and flexible enough to easily navigate down the GI tract, but not too soft and flexible that you're trying to kind of maneuver a noodle. You know, it needs to have a certain amount of firmness to it. So dialing that in took a whole lot of iteration. And just because, you know,

some part of it was missing, maybe the suction wasn't working or something like that on a prototype, that doesn't stop you from learning something. So I would highly recommend people, you know, fail fast, fail often, but fail inexpensively. And make sure you, you're learning something and you can build on that with every single prototype. Yeah, that's such great feedback. And it reminds me of an interview that I recently published with Lloyd Mincinger. And he mentioned something very similar. It's like if you need to go into this like early stage iteration, knowing that you're going

to fail. Like that that's the framework that you should be operating from. It's just get there as fast as you can. You're not going to design the perfect, you know, alpha or beta version of your product out of the gate. That's just not going to happen. If you have those expectations, they're not sort of rooted in reality. So to your point of like, I mean, obviously aim for, be developing a product that you think is

worth it and meet sort of like those user needs, right, that you're after. But, you know, it's just, at the end of the day, it's not going to be perfect, right? So it's, you know, you're looking for good enough at that point. Exactly. Yeah. Also, this isn't, you know, the fun part of R&D, but gathering and documenting the heck out of your requirement. So you have a really clear definition of what good looks like. And you can remember later on why you change this thing from 6.7 to 6.4 because I'll come back and bite you if you don't know why, all those things. It really helps everything down the road go better if you have a clear description of exactly what the jobs the product needs to do, why it needs to do them and what good performance looks

like in each of those jobs. Yeah, that's so funny. You'll be six months down the road and you'll be looking back at like a design change. You're like, why did we do that again? It speaks. I mean, I think most people that listen to the interviews are aware of like the, kind of, I guess, abundance of documentation that's required right when developing a device. But, you know, there's a reason for that, you know, and if you're not documenting everything correctly and I speak to even even a recent project that I've been involved with, it's like if things are documented and properly, it makes it difficult, you know, there's no doubt about that. So let's transition a little bit back to four moms, right?

We talked about that at the outside of this interview. For those familiar, definitely, I encourage you go check out the site just to get a sense for like, the product family that Mara was working on during her time there. But great consumer brand. When you think about your experiences at Four Moms, were there a few things that you sort of have brought into Indulumic, you know, from that, whether it's product development, whether it's just downstream marketing, upstream marketing. What, you know, were there a few things that you've, you've incorporated into what you're doing now in Indulumic? Yeah, absolutely. Four Moms is a really formative experience for sure. And you're right. They did an amazing job building.

a really strong brand there. And I think probably one of the biggest things I learned from that consumer experience was how important it is to follow the voice of customer. It can get so tempting to think that you know that you stop checking in with your end users and, you know, your customers. And I think the missteps we ever had at four moms were all due to times where we got a little overconfident that we knew what people wanted and didn't go back and trust the market data and do thorough voice of customer testing. So that's something that's really been kind of hammered into me the hard way is how important that is of listening to your customers and knowing your market in terms of how to talk to them and in position things. But the other thing I took away from

there was really about culture, team, and people. We had a really incredible team of, you know, young, passionate, enthusiastic people at four moms, particularly in the early startup days. It was a really fun environment where people were giving their discretionary time, giving their discretionary effort, and really felt like we were building something special. And so that's something that really, particularly as, you know, being an entrepreneur is more of a, not solo endeavor, but a small team endeavor, I really thought about as we're starting to grow, as I'm hiring people on and Delumic to support the commercial launch and as we're growing, how I can build a culture that feels, you know, fun and enthusiastic and supportive. And we're still far away from, you know, we don't

need a big office or anything like that yet. But that's definitely something that I kept in mind that was a big part of that company in its early days. I often, and I've made this comment before on with another interviews, if you're, if you think that sounds cliche, right, the importance of culture and team, you haven't made the mistake of not focusing on that, right? And then, and then seeing the fruit or reaping, right, what you sort of sewed and not and not making it a focal area, because it can be, if you don't have the right culture and you're not sort of slow to hire and sort of quick to, quick to fire, like that often, almost always, if not often, will not equate to, you know, a lot of, a lot of success or at the very least is going

to create a ton of challenges as you scale and grow. But kind of circling back around to your point earlier about voice of customer, that's one of the things I love about direct-to-consumer businesses, right? Regardless of kind of the category, the vertical, you're so close to the customer, right? And there's so many different like sort of tactics that are really interesting to be able to learn those insights and let those fuel sort of like, you know, other efforts, right? Whether it's, you know, product development, whether it's, you know, marketing, performance, marketing efforts, et cetera. And that's one of the things that often is, is difficult in the world of devices is you've got this sort of this gap between, you know, R&D and kind of product

marketing and then the end the end user, which is oftentimes the physician or clinician. And one of the things that I still to this day think is underappreciated is voice of sales, right? Because your sales team is often, that's the bridge, right? That's your bridge from sort of in-house to your external customers. And so many times we're, you know, when I say we, it's anyone in the device space is not utilizing your sales team to the fullest extent possible, right? Because they're the ones that are closest to your end users. And if you're not, if you're not sort of pulling your sales team on a consistent basis, I think there's a lot of information or a lot of a lot of pertinent value that, you know, that you're just, you're missing

out on if you're not, if you're not doing that. Would you kind of agree with that? Oh, absolutely. I couldn't agree more. And I think you're, you're making a really valuable point about how there is a lot that can translate from the consumer space and the device space, not only from from that relationship that you have between your salespeople and that they get to know the customers really well. But I've had people say, you know, oh, voice of customer, it doesn't matter as much or market segmentation doesn't matter that much within med device. And I couldn't disagree more. For example, for every product, you always need to find your champions. You always need to find your people who are going to be your beachhead and be your evangelists and help drive

your launch forward. Like in surgery, there's always going to be some surgeons or hospitals that are resistant to change, particularly if they hear a message about safety. That feels like that applies to somebody else. That's not for them. And what we've really found a lot of traction with is focusing on surgeons and hospitals who are inspired to think about the potential of tools like digital surgery, augmented reality during surgery, which, you know, endulimic isn't all the way to augmented reality.

But we're really advancing the field of digital surgery and what new things surgeons can see with digital tools during an operation. And finding those institutions surgeons that want to be part of that future are excited about kind of seeing what that future holds for them, they're the people who are going to be champions who are going to, you know, get up on a podium and talk about your device. And I think it's a common failure to just kind of chase the biggest name and not think about people who are actually inspired of and really see the vision of what you're trying to achieve with your device. And we're so excited about Indulum and to be on the, I think we're on the

kind of forefront of a wave of digital surgical tools. And we're one of the first ones out there. And we're using relatively low tech technology to do it. But in five years, I think you're going to see all these new digital surgical tools out there. And I'm excited to be kind of part of that revolution. And I want to work with the searchers that see that coming. Hey there. It's Scott. And thanks for listening in so far. The rest of this conversation is only available via our private podcast for MedSider Premium Members. If you're not a premium member yet, you should definitely consider signing up. We'll get full access to the entire library of interviews dating back to 2010. This includes conversations with experts like Renee Ryan, CEO of CalaHealth,

Nadine Miarid CEO of CVRX, and so many others. As a premium member, you'll get to join live interviews with these incredible medical device and health technology entrepreneurs. In addition, you'll get a copy of every volume of MedSider mentors at no additional cost. To learn more, head over to MedsiderRadio.com forward slash premium. Again, that's Medsiderradio.com forward slash premium.